The Auto Channel
The Largest Independent Automotive Research Resource
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

Daimler-Benz, Chrysler Merger Raise Eyebrows In Japan

7 May 1998

Nikkei news of Japan has reported that the merger between Daimler-Benz AG and Chrysler Corporation gives Japanese carmakers something to worry about. The merger of the two large western automobile manufacturers raises the possibility of increased increased price competition in the global auto market, which could put a lot of pressure on Japanese automakers.

Japanese auto industry watchers note that the merger may strengthen DaimlerChrysler's position in the subcompact car market, which has traditionally been dominated by Japanese automakers. Observers say the merger will allow the new company to reduce the price of making subcompact cars through sharing production costs.

Japanese carmakers have taken steps and/or made concrete plans to reduce the development and production costs associated with subcompact carmaking, but predicted gains are not likely to match the kind of economic advantage DaimlerChrysler will reap from its formation.

In order to cut production costs, Nissan Motor Company plans to cut the number of different chassis styles it makes from 15 to 5 by the year 2,000, while Mitsubishi will cut the number of platforms it makes in half. Mazda and Ford will produce a jointly developed sports-utility vehicle.